Schmallenberg virus (SBV) is a newly emerged orthobunyavirus that has caused widespread disease in cattle, sheep and goats in Europe. Like other orthobunyaviruses, SBV is characterized by a tripartite negative-sense RNA genome that encodes four structural and two non-structural proteins. This study showed that SBV has a wide in vitro host range, and that BHK-21 cells are a convenient host for both SBV propagation and assay by plaque titration. The SBV genome segments were cloned as cDNA and a three-plasmid rescue system was established to recover infectious virus. Recombinant virus behaved similarly in cell culture to authentic virus. The ORF for the non-structural NSs protein, encoded on the smallest genome segment, was disrupted by introduction of translation stop codons in the appropriate cDNA, and when this plasmid was used in reverse genetics, a recombinant virus that lacked NSs expression was recovered. This virus had reduced capacity to shut-off host-cell protein synthesis compared with the wild-type virus. In addition, the NSs-deleted virus induced interferon (IFN) in cells, indicating that, like other orthobunyaviruses, NSs functions as an IFN antagonist, most probably by globally inhibiting host-cell metabolism. The development of a robust reverse genetics system for SBV will facilitate investigation of its pathogenic mechanisms as well as the creation of attenuated strains that could be candidate vaccines.